<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
SERVOTRONICS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
XXXXXXXXXXXXXXXX
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: .......
(2) Aggregate number of securities to which transaction applies: ..........
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): ............
(4) Proposed maximum aggregate value of transaction: ......................
(5) Total fee paid: .......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ...............................................
(2) Form, Schedule or Registration Statement No.: .........................
(3) Filing Party: .........................................................
(4) Date Filed: ...........................................................
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
[SERVOTRONICS, INC. LETTERHEAD]
Dr. Nicholas D. Trbovich
Chairman and President of Servotronics, Inc.
June 7, 1999
Dear Fellow Shareholder:
The Annual Meeting of Shareholders will take place on June 29, 1999 at 2:30
p.m. at Center for Tomorrow, North Campus, State University of New York at
Buffalo, Flint Road (off Maple Road), Amherst, New York 14226. You are cordially
invited to attend.
The enclosed Notice of Annual Meeting and Proxy Statement describe the
matters to be acted upon during the meeting. The meeting will also include a
report on the state of the Company's business.
To ensure your representation at the meeting, even if you are unable to
attend, please sign the enclosed Proxy Card and return it in the postage paid
envelope.
If you have any questions in regard to completing your proxy, please call
our Treasurer, Lee D. Burns, at (716) 655-5990.
Your continued interest and support is very much appreciated.
Sincerely,
/s/ Dr. Nicholas D. Trbovich
DR. NICHOLAS D. TRBOVICH
<PAGE> 3
SERVOTRONICS, INC.
1110 Maple Street
P.O. Box 300
Elma, New York 14059
NOTICE OF
1999 ANNUAL SHAREHOLDERS' MEETING
To the Shareholders:
Notice is hereby given that the 1999 Annual Meeting of the Shareholders of
Servotronics, Inc. (the "Company") will be held at Center for Tomorrow, North
Campus, State University of New York at Buffalo, Flint Road (off Maple Road),
Amherst, New York 14226, on Tuesday, June 29, 1999 at 2:30 p.m., Buffalo time,
for the following purposes:
1. To elect four directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected and qualified.
2. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only shareholders of record at the close of business on May 21, 1999 are
entitled to notice of and to vote at the meeting or any adjournments thereof.
/s/ Dr. Nicolas D. Trbovich
DR. NICHOLAS D. TRBOVICH
Chairman of the Board,
President and Chief Executive Officer
Dated: June 7, 1999
SHAREHOLDERS ARE URGED TO VOTE BY SIGNING, DATING AND MAILING THE ENCLOSED PROXY
IN THE ENCLOSED ENVELOPE TO WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
<PAGE> 4
June 7, 1999
SERVOTRONICS, INC.
1110 Maple Street
P.O. Box 300
Elma, New York 14059
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 1999
The following information is furnished in connection with the Annual
Meeting of Shareholders of SERVOTRONICS, INC. (the "Company") to be held on June
29, 1999 at 2:30 p.m., Buffalo time, at Center for Tomorrow, North Campus, State
University of New York at Buffalo, Flint Road (off Maple Road), Amherst, New
York 14226. A copy of the Company's Annual Report to Shareholders for the fiscal
year ended December 31, 1998 accompanies this Proxy Statement. Additional copies
of the Annual Report, Notice, Proxy Statement and form of proxy may be obtained
from the Company's Treasurer, 1110 Maple Street, P.O. Box 300, Elma, New York
14059. This Proxy Statement and proxy card are first being mailed to
shareholders on or about June 7, 1999.
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy for the Annual Meeting of Shareholders is being
solicited by the directors of the Company. The proxy may be revoked by a
shareholder at any time prior to the exercise thereof by filing with the
Treasurer of the Company a written revocation or duly executed proxy bearing a
later date. The proxy may be revoked by a shareholder attending the meeting,
withdrawing such proxy and voting in person. The cost of soliciting the proxies
on the enclosed form will be paid by the Company. In addition to the use of
mails, proxies may be solicited by employees of the Company (who will receive no
additional compensation therefor) by means of personal interview, telephone or
telegraph, and it is anticipated that banks, brokerage houses and other
institutions, nominees or fiduciaries will be requested to forward the
soliciting material to their principals and to obtain authorization for the
execution of proxies. The Company may, upon request, reimburse banks, brokerage
houses and other institutions, nominees and fiduciaries for their expenses in
forwarding proxy material to their principals. The Company has retained the
services of Beacon Hill Partners, Inc., 90 Broad Street, New York, New York
10004, to assist in the solicitation of proxies and will pay such firm a fee of
approximately $3,000 plus expenses.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The record date for determining shares entitled to vote has been fixed at
the close of business on May 21, 1999. On such date there were outstanding
2,405,488 shares of common stock of the Company, $.20 par value ("Common
Stock"), entitled to one vote each.
1
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table lists the persons that owned beneficially, as of May
21, 1999, more than five percent of the outstanding Common Stock, based on the
Company's records. Unless otherwise stated, each person has sole voting and
investment power with respect to the shares indicated as beneficially owned by
that person.
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS OF NATURE OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP CLASS(1)
------------------- -------------------- ----------
<S> <C> <C>
Servotronics, Inc. Employee 896,743(2) 37.3%
Stock Ownership Trust
1110 Maple Street
P.O. Box 300
Elma, New York 14059
Dr. Nicholas D. Trbovich 326,089(3) 13.4%
1110 Maple Street
P.O. Box 300
Elma, New York 14059
Harvey Houtkin 354,500(4) 14.7%
78 Lafayette Avenue
Suffern, New York 10901
</TABLE>
- ---------------
(1) Percent of class is based upon 2,405,488 shares outstanding as of May 21,
1999 plus, in the case of Dr. Trbovich, the shares subject to his stock
option.
(2) The trustees of the Servotronics, Inc. Employee Stock Ownership Trust --
Nicholas D. Trbovich, Jr., Lee D. Burns and Raymond C. Zielinski -- direct
the voting of unallocated shares. The participants in the related plan have
the right to direct the voting of shares which have been allocated to their
respective accounts; if a participant does not direct the vote, the trustees
may direct the vote of that participant's shares. As of May 21, 1999
approximately 279,779 shares have been allocated to the accounts of
participants and approximately 592,750 shares (24.6% of the shares
outstanding) remain unallocated.
(3) This amount includes (i) 39,276 shares held by a charitable foundation for
which Dr. Trbovich serves as a trustee; (ii) an option to acquire 37,800
shares; (iii) approximately 35,067 shares allocated to Dr. Trbovich's
account under the Servotronics, Inc. Employee Stock Ownership Plan; and (iv)
approximately 3,084 shares beneficially owned by certain of Dr. Trbovich's
children (as to which Dr. Trbovich disclaims beneficial interest). This
amount does not include the shares beneficially owned by certain of Dr.
Trbovich's other relatives.
(4) Based on a statement on Schedule 13D, as last amended on April 30,1999,
filed by Mr. Houtkin with the Securities and Exchange Commission. According
to Mr. Houtkin's statement, he has sole voting and investment power with
respect to 354,500 shares and shared voting and investment power with
respect to 19,356 shares owned by Wanshef, Inc., which is controlled by Mr.
Houtkin.
2
<PAGE> 6
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of May 21, 1999, information as to the
beneficial ownership of shares of Common Stock held by each nominee for director
and by all directors and officers as a group (each individual listed in the
following table has sole voting and investment power with respect to the shares
indicated as beneficially owned by that person, except as otherwise indicated):
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS(1)
---------------- -------------------- ----------
<S> <C> <C>
Dr. Nicholas D. Trbovich 326,089(2) 13.4%
Nicholas D. Trbovich, Jr. 51,537(3) 2.1
Donald W. Hedges 22,336(4) 0.9
Dr. William H. Duerig 16,193(5) 0.7
All directors and executive officers as a 1,064,205.739(6)(7) 42.1
group
</TABLE>
- ---------------
(1) Percent of class is based upon 2,405,488 shares outstanding as of May 21,
1999 plus the number of shares subject to stock options held by the
indicated person or group.
(2) See note (3) to the table in "Security Ownership of Certain Beneficial
Owners."
(3) This amount includes 36,717 shares which Mr. Trbovich has the right to
acquire under stock options and approximately 14,820 shares allocated to Mr.
Trbovich's account under the Servotronics, Inc. Employee Stock Ownership
Plan. Does not include shares held by the Servotronics, Inc. Employee Stock
Ownership Trust (the "ESOT") as to which Mr. Trbovich serves as one of three
trustees. See note (6) below and the table in "Security Ownership of Certain
Beneficial Owners."
(4) This amount includes 12,600 shares which Mr. Hedges has the right to acquire
under a stock option. Mr. Hedges has sole voting and investment power with
respect to 9,261 shares and shared voting and investment power with respect
to 475 shares.
(5) This amount includes 12,600 shares which Dr. Duerig has the right to acquire
under a stock option. Dr. Duerig has sole voting power in respect to 3,593
shares.
(6) Includes unallocated shares held by the ESOT over which certain officers, as
trustees of the ESOT, may be deemed to have voting power, as well as shares
allocated to the accounts of all officers as a group under the related plan.
See the table in "Security Ownership of Certain Beneficial Owners" and note
(2) thereto.
(7) See notes (2) through (5) above.
PROPOSAL 1
ELECTION OF DIRECTORS
The By-Laws of the Company provide that there shall be not less than three
directors nor more than nine and that the number of directors to be elected at
the Annual Meeting of Shareholders shall be fixed by the Board of Directors. The
Board of Directors has fixed the number of directors to be elected at the
meeting at four. Each person so elected shall serve until the next Annual
Meeting of Shareholders and until his successor is elected and shall have
qualified.
3
<PAGE> 7
The directors recommend a vote FOR the four nominees listed below. Unless
instructed otherwise, proxies will be voted FOR these nominees. Each nominee is
currently serving as a director of the Company and was elected at the Company's
1998 Annual Meeting of Shareholders.
The directors believe that all of the nominees are willing and able to
serve as directors of the Company. If any nominee at the time of election is
unable or unwilling to serve or is otherwise unavailable for election, the
enclosed proxy will be voted in accordance with the best judgment of the person
or persons voting the proxy. Each nominee, to be elected as a director, must
receive the affirmative vote of a plurality of the votes cast at the meeting.
The table below sets forth certain information regarding the nominees for
election to the Company's Board of Directors.
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY
AND PRINCIPAL OCCUPATION
AND BUSINESS EXPERIENCE
NAME AGE FOR PAST FIVE YEARS
---- --- -------------------------
<S> <C> <C>
Dr. William H. Duerig 77 Director of the Company since 1990; Physicist
and Senior Program Manager for Kearfott Guidance
& Navigation Corporation for more than five
years prior to retirement in 1993.
Donald W. Hedges 78 Director of the Company since 1967;
self-employed attorney since 1988.
Nicholas D. Trbovich, Jr. 39 Director of the Company since 1990; Vice
President of the Company since 1990; Director of
Corporate Development of the Company from 1987
to 1990.
Dr. Nicholas D. Trbovich 63 Chairman of the Board of Directors, President
and Chief Executive Officer of the Company since
1959.
</TABLE>
COMMITTEES AND MEETING DATA
The Board of Directors has an Audit Committee comprised of Messrs. Duerig
and Hedges. The Audit Committee meets with the Company's independent auditors
and reviews with them matters relating to corporate financial reporting and
accounting procedures and policies, the adequacy of financial, accounting and
operating controls, the scope of the audit and the results of the audit. The
Audit Committee is also charged with the responsibility of submitting to the
Board of Directors any recommendations it may have from time to time with
respect to financial reporting and accounting practices and policies and
financial, accounting and operation controls and safeguards.
Other than the functions performed by the Audit Committee, all functions of
individual committees are performed by the Board of Directors. During the fiscal
year ended December 31, 1998, the Audit Committee met once and the full Board of
Directors met on nine occasions. No director attended less than 100% of the
meetings held.
4
<PAGE> 8
EXECUTIVE OFFICERS
The following is a listing of the Company's executive officers:
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY
AND PRINCIPAL OCCUPATION
AND BUSINESS EXPERIENCE
NAME AGE FOR PAST FIVE YEARS
---- --- -------------------------
<S> <C> <C>
Dr. Nicholas D. Trbovich 63 See table under "Election of Directors."
Nicholas D. Trbovich, Jr. 39 See table under "Election of Directors."
Raymond C. Zielinski 54 Vice President since 1990.
Lee D. Burns 57 Treasurer and Secretary since 1991.
</TABLE>
Nicholas D. Trbovich, Jr. is the son of Dr. Nicholas D. Trbovich. There are
no other family relationships between any of the directors or executive officers
of the Company.
EXECUTIVE COMPENSATION
Directors' Fees. Under the Company's standard compensation arrangements
with directors who are not employees, they are paid a yearly director's fee of
$10,000 plus a per meeting fee of $650 and their actual expenses for attendance
at Board Meetings. Directors who are also employees do not receive the
director's and/or meeting fees.
Compensation Table. The following table shows the compensation paid by the
Company to each executive officer of the Company whose total salary and bonus
from the Company and its subsidiaries exceeded $100,000 during any of the last
three fiscal years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------------
NAME AND OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) COMPENSATION(2)
------------------ ---- -------- ------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Dr. Nicholas D. Trbovich 1998 $288,558 $50,000 $17,265 $17,417
President and CEO 1997 290,529 45,000 28,027 34,380
1996 258,872 20,000 26,458 17,612
Raymond C. Zielinski 1998 $ 99,677 $ 6,500 $ 7,846 $10,275
Vice President 1997 91,962 4,500 -- 15,796
1996 84,820 7,600 3,427 15,923
</TABLE>
- ---------------
(1) Includes for Dr. Trbovich $16,442, $26,145 and $24,660 in 1998, 1997 and
1996, respectively, and $7,846 and $3,427 for Mr. Zielinski in 1998 and
1996, respectively, for untaken vacation pursuant to a policy that is
generally applicable to all employees of the Company; these amounts reflect
accrued vacation earned and expensed by the Company over several years and
prior to the year payment was received.
(2) All Other Compensation for 1998 includes (i) an allocation of 1,869.784
shares for Dr. Trbovich and 1,246.40 shares for Mr. Zielinski of Common
Stock of the Company under the Servotronics, Inc. Employee Stock Ownership
Plan valued as of November 30, 1998 (the date of the allocation) at the
closing price on the American Stock Exchange on that date of $7 1/4 per
share and (ii) $3,861 for life insurance for Dr. Trbovich and $426 for Mr.
Zielinski, but excludes (iii) based on actuarially determined formulas
designed to achieve, among other things, benefit parity, $165,000 which the
5
<PAGE> 9
Company accrued in 1996 for a pension-related deferred compensation program
for the benefit of Dr. Trbovich.
The "Bonus" column of the compensation table above includes discretionary
incentive payments authorized by the Board of Directors and paid in the year
indicated in the table. Discretionary payments authorized for 1999 will be
included in the compensation table for 1999 to the extent they are paid in that
year. The Board of Directors has made no commitment for incentive payments in
subsequent years.
Employment Agreement. Dr. Trbovich has an employment agreement with the
Company pursuant to which he is entitled to receive minimum direct compensation
of $310,000 per annum or such greater amount as the Company's Board of Directors
may determine and lifetime health and life insurance benefits. In the event of
Dr. Trbovich's death or total disability during the term of the employment
agreement, he or his estate is entitled to receive 50% of the compensation he is
receiving from the Company at the time of his death or disability during the
remainder of the term of the employment agreement. Also, in the event of (i) a
breach of the agreement by the Company, (ii) a change in control of the Company,
as defined, or (iii) a change in the responsibilities, positions or geographic
office location of Dr. Trbovich, he is entitled to terminate the agreement and
receive a payment of 2.99 times his average annual compensation from the Company
for the preceding five years. If this provision is invoked by Dr. Trbovich and
the Company makes the required payment, the Company will be relieved of any
further liability under the agreement notwithstanding the number of years
covered by the agreement prior to termination. In the event the agreement is not
extended by the Company beyond the scheduled expiration date (September 30,
2004), as such date may be extended, Dr. Trbovich will be entitled to a
severance payment equal to nine months' salary and benefits.
FISCAL YEAR-END OPTION VALUES
The following table summarizes information with respect to unexercised
stock options held by Dr. Trbovich and Raymond C. Zielinski at December 31,
1998, all of which are presently exercisable.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
NAME OPTIONS AT 12/31/98 AT 12/31/98(1)
- ---- ---------------------- --------------------
<S> <C> <C>
Dr. Nicholas D. Trbovich 37,778 $160,349
Raymond C. Zielinski 5,724 6,228
</TABLE>
- ---------------
(1) Determined by subtracting the exercise price (approximately $2.63 per share
for Dr. Trbovich and $5.79 per share for Mr. Zielinski) from the closing
price for shares of Common Stock reported by the American Stock Exchange on
December 31, 1998, which was $6 7/8 per share.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
During 1998, certain of Dr. Trbovich's sons were employed by the Company
and received, in the aggregate, $128,409 in compensation from the Company.
6
<PAGE> 10
INDEPENDENT PUBLIC ACCOUNTANTS
PricewaterhouseCoopers LLP which has served as the Company's independent
public accountants since 1976, has been selected by the Board of Directors as
the independent public accountants for the Company's current fiscal year. A
representative of PricewaterhouseCoopers is expected to be present at the
meeting with the opportunity to make a statement if he desires to do so and will
be available to respond to appropriate questions of shareholders.
VOTING INFORMATION
The presence, in person or by properly executed proxy, of the holders of
shares of Common Stock entitled to cast a majority of the votes entitled to be
cast by the holders of all outstanding shares of Common Stock is necessary to
constitute a quorum. Shares of Common Stock represented by a properly signed,
dated and returned proxy will be treated as present at the meeting for the
purposes of determining a quorum. Proxies relating to "street name" shares of
Common Stock that are voted by brokers will be counted as shares of Common Stock
present for purposes of determining the presence of a quorum, but will not be
treated as shares of Common Stock having voted at the Meeting as to any proposal
as to which the broker does not vote.
SHAREHOLDER PROPOSALS
Shareholder proposals must be received at the Company's offices no later
than February 8, 2000, in order to be considered for inclusion in the Company's
proxy materials for the 2000 Annual Meeting.
OTHER MATTERS
So far as the directors are aware, no matters other than the election of
directors will be presented to the meeting for action on the part of the
shareholders. If any other matters are properly brought before the meeting, it
is the intention of the persons named in the accompanying proxy to vote thereon
the shares to which the proxy relates in accordance with their best judgment.
By Order of the Directors
/s/ Dr. Nicholas D. Trbovich
DR. NICHOLAS D. TRBOVICH
Chairman of the Board, President
and Chief Executive Officer
Elma, New York
7
<PAGE> 11
SERVOTRONICS, INC.
1110 Maple Street
P.O. Box 300
Elma, New York 14059
PROXY
THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Dr. William H. Duerig, Donald W. Hedges,
Nicholas D. Trbovich, Jr. and Dr. Nicholas D. Trbovich, and each or any of them,
Proxies for the undersigned, with full power of substitution, to vote all shares
of Servotronics, Inc. which the undersigned would be entitled to vote at the
Annual Meeting of Shareholders to be held at 2:30 p.m., Buffalo time, June 29,
1999, at Center for Tomorrow, North Campus, State University of New York at
Buffalo, Flint Road (off Maple Road), Amherst, New York 14226, or any
adjournments thereof, and directs that the shares represented by this Proxy
shall be voted as indicated below:
1. Election of Directors
[ ] FOR all nominees listed below
(except as otherwise marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for all
nominees listed below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH HIS NAME IN THE LIST BELOW:
Dr. William H. Duerig, Donald W. Hedges, Nicholas D. Trbovich, Jr. and
Dr. Nicholas D. Trbovich.
(Continued and to be signed on the reverse side)
(Continued from other side)
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
SHAREHOLDER. THE BOARD OF DIRECTORS FAVORS A VOTE FOR THE NOMINEES FOR DIRECTOR
LISTED ABOVE. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR THOSE
NOMINEES.
Please date and sign your name exactly as it appears below and return this
Proxy promptly in the enclosed envelope, which requires no postage if mailed in
the United States.
Dated , _________________1999
-----------------------------
Signature
-----------------------------
Signature
Joint owners should each sign. Executors, administrators, trustees, guardians
and corporate officers should indicate their title.
Proxy Card
